UK Member of Parliament calls on ceasing crowdfunding support

6 August 2016

British chairman of the Select Committee at the Treasury expressed his concern over the increasingly growing popularity of the p2p lending and crowdfunding in the UK, as people are looking for better saving and loan terms being misled about the potential risks. He notes that crowdfunding and peer-to-peer websites entice consumers into risky schemes.

The MP urges savers along with the investors to be aware of the aftermaths. He points to the fact that the p2p services have no such a basis as the banks offering savings accounts. Higher interests on such services may implicate higher risks.

The politician continues saying that governmental incentives in taxes to such businesses may lead consumers to using doubtful financial services and asks the FCA to stay awake about the arising risks by reconsidering such subsidies.

In this regard the FCA head replied that she continuously intervened the p2p lending commercials and advertisements that may mislead people on the riskiness of such financial schemes forcing the companies to change their promotional campaigns and advertisement materials. 9 of 10 financial advertisements were removed under her monitoring from public view.

She underlined that while the government is aware of the benefits for both investors and savers from the crowdfunding business, it stays alert on the growing risks and make every effort to protect people and maintain competitive market.